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April 21, 2016updated 05 Sep 2016 10:51am

Digital divide threatens UK economy as businesses are urged to hire digital natives to the board

News: UK ranks only 14th in the world for company-level adoption of digital technology.

By CBR Staff Writer

The British economy is being hit hard by an increasing digital divide, with 45% of companies falling behind in the adoption of digital technologies and processes.

Accroding to new research by the CBI and IBM, the UK ranks only fourteenth in the world for company-level adoption of digital technology, despite taking the top place globally for e-commerce and fifth place for the availability of technology.

A mix of connectivity challenges and security concerns were cited as the main issues to digital adoption, with a lack of appropriate skills inside their business (42% of firms) and an unclear return on investment (33%) the predominant reasons as to why UK firms are struggling to digitise their businesses at the rate of peers in other countries.

Although UK companies are struggling to digitise, the majority of companies were fully aware of the benefits of embracing technology. 94% of companies said that digital technology is capable of revolutionising the business landscape, driving productivity, growth and job creation, while 73% saw improved customer satisfaction and experience as its largest benefit.

The CBI has issued three recommendations for UK businesses in light of the research’s findings, with the first being the hiring of a Chief Digital or Technology Officer (CDO/CTO) to the senior executive team for enhancing digital strategy and execution.

UK businesses are also advised to increase the age and skills diversity of boards and board advisers, drawing on the expertise of a new generation of digital natives.

Lastly, the CBI has urged UK businesses to work more closely with each other to share ideas. The CBI said more digitally advanced and proficient companies could run digital clinics and provide coaching for those firms which find it difficult to get started.

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CBI director-general Carolyn Fairbairn said: "It’s vital that businesses in all sectors – from manufacturing to retail – truly understand digital technology’s potential, from the boardroom to the shop or factory floor.

"And by harnessing the expertise of the generation at the heart of the digital revolution, firms will be better able to make the right investments for their digital future."

In the UK, 28% of ‘pioneer’ businesses have already invested in advanced artificial intelligence and cognitive technologies in the last year, but only 9% of those struggling to adopt the digital economy have done so and 16% plan to carry out it in the coming year.

IBM UK and Ireland chief executive David Stokes said: "Digital offers not only the opportunity for much needed productivity gains alongside a new canvas upon which organisations can innovate to drive new levels of growth.

"As one of the leading digital economies in the world, the UK finds itself with a tremendous opportunity and responsibility for business leaders to sustain and grow our leadership in the world. This is an opportunity that we in the business community should be hugely excited to face together."

 

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